Proper journal form is a way of recording a transaction with the date, debit account, and
debit amount shown on one line, and the credit account (indented) and credit amount
shown on the next line.
Another term for short-term investments is marketable securities.
Recording incurred but unpaid expenses is an example of an accrual.
Held-to-maturity securities are always debt securities, and never equity securities.
Cash bonuses are usually given to encourage short-term performance.
An organization with several branches and a highly developed system for capital
investment analysis, would require that all proposals should go through preliminary
screening.
Cash dividends become a liability of a corporation when the stock goes ex-dividend.
When no-par common stock without a stated value is issued for cash, the Common
Stock account is credited for an amount equal to the cash proceeds.
An increase in the unit sales price will increase unit variable price.
The average costing method is a costing method in which the cost flow follows the
logical product flow.
Factory employees’ wages are recorded into the Work in Process Inventory account.
A transposition error will cause the trial balance to be out of balance by an amount that
is evenly divisible by two.
Joint costs are also referred to as common cost.
Partners’ Withdrawals accounts have normal debit balances.
Several Work in Process Inventory accounts are used in a process costing system.
Total manufacturing costs and the change in the Work in Process Inventory are used to
compute the cost of goods sold.
Management accounting accumulates, maintains, and processes an organization’s
financial and nonfinancial information.
Which of the following products would probably use a job order costing system?
A.Pens
B.Instant coffee
C.Computer monitors
D.Advertisements
Which of the following accounts would likely not need to be adjusted at year end?
A.Equipment
B.Prepaid Insurance
C.Supplies
D.Owner’s Withdrawals
In a process costing system, percentage-of-completion factors normally are obtained
from
A.accounting records.
B.job order cost cards.
C.supervisors in the production departments.
D.time cards.
Which of the following accounts could not be credited in an adjusting entry?
A.Service Revenue
B.Prepaid Rent
C.Office Supplies
D.Interest Receivable
How would the collection of an account receivable affect the current ratio and the quick
ratio, respectively?
A.No effect on current ratio; increase in quick ratio
B.Increase in current ratio; increase in quick ratio
C.No effect on current ratio; no effect on quick ratio
D.Decrease in current ratio; decrease in quick ratio
Which of the following items would not be included in a statement of cash flows
prepared using the direct method?
A.Net income.
B.Cash paid for dividends.
C.Sale of a plant asset.
D.Cash payments for purchases.
Information for the current month for Process D is shown below.
Units completed’”72,000
Units in ending work in process inventory’”5,000
Direct materials are added at the beginning of the process. Beginning work in process is
50 percent complete as to conversion costs; ending work in process inventory is 40
percent complete. Determine the cost of ending work in process inventory.
A.$7,040
B.$5,120
C.$3,200
D.$3,760
A reversing entry would never involve which of the following accounts?
A.Interest Expense
B.Wages Payable
C.Cash
D.Interest Income
On July 1, 20×5, Blaylock Corporation had 40,000 shares of its $100 par value common
stock outstanding. On July 2, 20×5, Blaylock declared a 15 percent stock dividend to be
distributed on August 6, 20×5, to shareholders of record on July 16, 20×5. What amount
of retained earnings should be transferred to contributed capital because of this
dividend?
A.None
B.Market value of the stock at the date of distribution multiplied by the number of
dividend shares
C.Market value of the stock at the date of declaration multiplied by the number of
dividend shares
D.Par value per share multiplied by the number of dividend shares
Process value analysis (PVA) identifies all activities of a production and/or assembly
operation for the purpose of
A.preparing budgets based on activity centers.
B.determining the value of the process.
C.replacing cost drivers used in cost assignment analyses with activities.
D.relating cost assignment to the activities that caused the cost to be incurred.
Which of the following statements contradicts the philosophy underlying the
just-in-time operating environment?
A.The work force must become multiskilled in order to operate different machines and
perform other tasks in the work cell.
B.A customer order triggers the purchase of materials and the activation of the
production process.
C.Large inventories are maintained in order to fulfill customer orders on a timely basis.
D.Flexible work cells are created to increase productivity.
All of the following are broad principles underlying the accountant’s code of
professional ethics except
A.objectivity
B.integrity
C.loyalty
D.independence
Which of the following equations represents a breakeven point?
A.Sales Price + Variable Cost – Fixed Cost = 0
B.Variable Cost -Fixed Cost = Sales Price
C.Sales Price + Fixed Cost = Variable Cost
D.Sales Price – Variable Cost = Fixed Cost
Which of the following is correct?
A.Total assets + Partner’s equity = Total liabilities.
B.Total assets + Partner’s equity – Total liabilities = Total equity.
C.Total assets – Partner’s equity = Total liabilities.
D.Total assets + Total liabilities = Partner’s equity.
A change to just-in-time manufacturing expands mainly the role of the
A.cost accountant.
B.machine operator.
C.purchasing manager.
D.quality control inspector.
Which of the following costs usually would not be included in the inventory cost?
A.Storage costs
B.Related tariffs
C.Invoice price less purchases discounts
D.Insurance on goods in transit
Robert Inc. uses the standard costing method. The company’s main product is a
fine-quality headphones that normally takes 0.5 hour to produce. Normal annual
capacity is 5,000 direct labor hours, and budgeted fixed overhead costs for the year
were $8,750. During the year, the company produced and sold 5,800 units. Actual fixed
overhead costs were $6,000.
Using the information provided for Robert Inc, compute the fixed overhead budget
variance.
A.$925 (U)
B.$3,675 (U)
C.$2,750 (F)
D.$5,800 (U)
The exclusive right to publish and sell a literary, artistic, or musical work is called a
A.patent.
B.trademark.
C.copyright.
D.franchise.
Which of the following is an example of an accrual?
A.Purchase of equipment.
B.Prepaid insurance.
C.Salaries earned but not yet paid.
D.All of these choices.
During August, Radio City sold 200 ipods for $50 each. Each ipod had cost Audio City
$31 to purchase and carried a two-year warranty. If 5 percent typically need to be
replaced over the warranty period and one actually is replaced during August, the entry
to record the Product Warranty Expense is
Use the following information to answer the question below.
The following transactions involving Cactus Wren Corporation occurred during the
year:
Apr. 1 Purchased 2,000 shares of its own preferred stock for $20, the current market
price. This is the first transaction involving its own stock engaged in by the company.
May 3 Sold 400 of the shares purchased on April 1 for $25 per share.
June 5 Retired 600 of the shares purchased on April 1. The original issue price was $10.
The par value of the stock is $5.
The entry to record the May 3 transaction is:
Dechter Company acquired a mine for $1,800,000 which has an estimated residual
value of $300,000 and contains an estimated 1,500,000 tons of coal. If 230,000 tons of
coal are mined and sold during the first year, the entry to record the depletion charge is:
Why is the separation of duties an important control activity in a good system of
internal control?
Using the following information, prepare a single report setting forth the variable
costing income statement as well as a performance report for Profit Center West.